On April 4, 2016, Pomerantz LLP was appointed Co-Lead Counsel in GW Pharmaceuticals Securities Litigation. The class action, filed in United States District Court, Southern District of New York, and docketed under 16-cv-00472, is on behalf of a class consisting of all persons or entities who purchased GW Pharmaceuticals securities between December 4, 2014 and January 8, 2016 inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
GW Pharmaceuticals is a biopharmaceutical company. Together with its subsidiaries, GW Pharmaceuticals engages in discovering, developing, and commercializing cannabinoid prescription medicines.
The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company lacked effective internal financial controls; (ii) the Company lacked effective controls over completeness and valuation of clinical trial accruals; and (iii) as a result of the foregoing, Defendants’ statements about GW Pharmaceuticals’ business, operations, and prospects were false and misleading and/or lacked a reasonable basis at all relevant times.
On January 10, 2016, The Sunday Times reported that GW Pharmaceuticals had disclosed in its annual report for the fiscal year ended September 30, 2015 (the “FY 2015 20-F”), filed with the SEC the previous month, that its internal financial controls were not effective as of September 30, 2015, and further disclosed that management had determined that it lacked effective controls over the completeness and valuation of clinical trial accruals. Specifically, the 2015 20‑F reported that management lacked sufficiently precise controls: (1) to evaluate the completeness and accuracy of the calculation of clinical trial accruals due to the incorrect allocation of expenditure to clinical studies; or (2) to ensure completeness of clinical trial accruals in connection with contractual progress payment liabilities.
On this news, GW Pharmaceuticals stock fell $3.55, or nearly 6%, to close at $56.31 per share on January 11, 2016.